PLTR Palantir Technologies Inc

Palantir Technologies Inc. (NYSE:PLTR) today announced financial results for the third quarter ended September 30, 2024.

“We absolutely eviscerated this quarter, driven by unrelenting AI demand that won’t slow down. This is a U.S.-driven AI revolution that has taken full hold. The world will be divided between AI haves and have-nots. At Palantir, we plan to power the winners,” said Alexander C. Karp, Co-Founder and Chief Executive Officer of Palantir Technologies Inc.

Q3 2024 Highlights

• U.S. revenue grew 44% year-over-year and 14% quarter-over-quarter to $499 million
  • U.S. commercial revenue grew 54% year-over-year and 13% quarter-over-quarter to $179 million
  • U.S. government revenue grew 40% year-over-year and 15% quarter-over-quarter to $320 million
• Revenue grew 30% year-over-year and 7% quarter-over-quarter to $726 million
• Closed 104 deals over $1 million
• Customer count grew 39% year-over-year and 6% quarter-over-quarter
• GAAP net income of $144 million, representing a 20% margin
• GAAP income from operations of $113 million, representing a 16% margin
• Adjusted income from operations of $276 million, representing a 38% margin
• Rule of 40 score of 68%
• GAAP earnings per share (“EPS”) grew 100% year-over-year to $0.06
• Adjusted EPS grew 43% year-over-year to $0.10
• Cash, cash equivalents, and short-term U.S. Treasury securities of $4.6 billion
• Cash from operations of $420 million, representing a 58% margin and $995 million on a trailing twelve month basis
• Adjusted free cash flow of $435 million, representing a 60% margin and over $1 billion on a trailing twelve month basis

Q3 2024 Financial Summary

(Unaudited)

(Amounts in thousands, except percentages and per share amounts)

Third Quarter

Amount

Revenue

$

725,516

 

Year-over-year growth

 

30

%

 

 

 

 

 

Amount

 

Margin

Income from Operations

$

113,140

 

 

16

%

Adjusted Income from Operations

$

275,515

 

 

38

%

Cash from Operations

$

419,772

 

 

58

%

Adjusted Free Cash Flow

$

434,543

 

 

60

%

Net Income Attributable to Common Stockholders

$

143,525

 

 

20

%

Adjusted Net Income Attributable to Common Stockholders

$

241,557

 

 

Adjusted EBITDA

$

283,602

 

 

39

%

GAAP EPS, Diluted

$

0.06

 

 

Adjusted EPS, Diluted

$

0.10

 

 

Outlook

For Q4 2024, we expect:

• Revenue of between $767 - $771 million.
• Adjusted income from operations of between $298 - $302 million.

For full year 2024:

• We are raising our revenue guidance to between $2.805 - $2.809 billion.
• We are raising our U.S. commercial revenue guidance to in excess of $687 million, representing a growth rate of at least 50%.
• We are raising our adjusted income from operations guidance to between $1.054 - $1.058 billion.
• We are raising our adjusted free cash flow guidance to in excess of $1 billion.
• And we continue to expect GAAP operating income and net income in each quarter of this year.

CEO Letter

Palantir CEO Alex Karp’s quarterly letter is available through Palantir’s website at https://www.palantir.com/newsroom/letters.

Earnings Webcast

A live public webcast will be held at 3:00 PM MT / 5:00 PM ET today to discuss the results for our third quarter ended September 30, 2024 and financial outlook. The webcast can be accessed by registering online at https://palantir.events/palantirearnings-q32024. A replay of the webcast will be available at https://investors.palantir.com following the event.

An investor presentation, including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, will be available through Palantir’s Investor Relations website at https://investors.palantir.com.

Forward-Looking Statements

This press release and statements on our earnings webcast contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our financial outlook, product development and related timing, distribution, and pricing, expected benefits of and applications for our software platforms, business strategy and plans (including strategy and plans relating to our Artificial Intelligence Platform (“AIP”), sales and marketing efforts, sales force, partnerships, and customers), investments in our business, market trends and market size, opportunities (including growth opportunities), our expectations regarding our existing and potential investments in, and commercial contracts with, various entities, our expectations regarding macroeconomic events, our expectations regarding potential eligibility or inclusion in market indices, our expectations regarding our share repurchase program, and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as “guidance,” “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the “SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and other filings and reports that we may file from time to time with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. In particular, the following factors, among others, could cause our results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our available funds to meet our liquidity needs; the demand for our platforms, product offerings, and services in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to successfully execute our channel sales and other strategic initiatives with third parties; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the impact on certain profitability measures from the acceleration of any unrecognized stock-based compensation expense if market-based vesting criteria are achieved from the continued increase in our stock price; the seasonality of our business; the implementation process for our platforms, which may be complex and lengthy; our ability to successfully develop and deploy new technologies to address the needs of our existing or prospective customers; our ability to make our platforms and product offerings easier to install, consume, and use; our ability to maintain and enhance our brand and reputation; our ability to maintain and enhance our culture as our business grows and as we pursue our business and financial goals; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; the impact of recent or future global macroeconomic and geopolitical events, such as the ongoing Russia-Ukraine and Israel conflicts, heightened interest rates, monetary policy changes, or foreign currency fluctuations, on the business and operations of our company or of our existing or prospective customers and partners; issues raised by the use of artificial intelligence in our platforms; and any breach or access to our or customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

Additional Definitions

For the purpose of this press release, our earnings webcast, and our CEO’s letter:

• Total contract value (“TCV”) is the total potential lifetime value of contracts entered into with, or awarded by, our customers at the time of contract execution, annual contract value (“ACV”) closed is defined as the total value of contracts closed in the period divided by the dollar-weighted average contract duration of those same contracts, and remaining deal value (“RDV”) is the total remaining value of contracts as of the end of the reporting period. Except as noted below, TCV, ACV, and RDV each presume the exercise of all contract options available to our customers and no termination of contracts. However, the majority of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised. Further, RDV may exclude all or some portion of the value of certain commercial contracts as a result of our ongoing assessments of customers’ financial condition, including the consideration of such customers’ ability and intention to pay, and whether such contracts continue to meet the criteria for revenue recognition, among other factors.

• Remaining performance obligations (“RPO”) reflect the total values of contracts that have been entered into with, or awarded by, our customers, and represent non-cancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. We have elected the practical expedient, as permitted under Accounting Standards Codification 606—Revenue from Contracts with Customers, to not disclose remaining performance obligations for contracts with original terms of twelve months or less.

• The term “Strategic Commercial Contracts” is as defined in our Quarterly Report on Form 10-Q filed on August 6, 2024.

• The term “Rule of 40” refers to the sum of our revenue growth rate year-over-year and our adjusted operating margin for each of the periods presented.

Non-GAAP Financial Measures

This press release and the accompanying tables, as well as our earnings webcast and our CEO’s letter, contain the non-GAAP financial measures adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; adjusted operating margin; adjusted free cash flow; adjusted free cash flow margin; adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”); adjusted EBITDA margin; adjusted net income attributable to common stockholders; and adjusted EPS, diluted.

We believe these non-GAAP financial measures and other metrics described in this press release help us evaluate our business, identify trends affecting Palantir’s business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. We exclude employer payroll taxes related to stock-based compensation as it is difficult to predict and outside of Palantir’s control.

Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. For example, adjusted free cash flow does not reflect our future contractual commitments or the total increase or decrease in our cash balances for a given period. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future, such as stock-based compensation and related employer payroll taxes, the effect of which may be significant.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir’s Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, and webcasts.

About Palantir Technologies Inc.

Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

Palantir Technologies Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Revenue

$

725,516

 

 

$

558,159

 

$

2,037,988

 

 

$

1,616,662

 

Cost of revenue (1)

 

146,639

 

 

 

107,922

 

 

391,457

 

 

 

322,466

 

Gross profit

 

578,877

 

 

 

450,237

 

 

1,646,531

 

 

 

1,294,196

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing (1)

 

209,474

 

 

 

176,373

 

 

599,460

 

 

 

547,629

 

Research and development (1)

 

117,555

 

 

 

105,708

 

 

336,376

 

 

 

295,341

 

General and administrative (1)

 

138,708

 

 

 

128,173

 

 

411,335

 

 

 

397,054

 

Total operating expenses

 

465,737

 

 

 

410,254

 

 

1,347,171

 

 

 

1,240,024

 

Income from operations

 

113,140

 

 

 

39,983

 

 

299,360

 

 

 

54,172

 

Interest income

 

52,120

 

 

 

36,864

 

 

142,065

 

 

 

88,027

 

Other income (expense), net

 

(8,110

)

 

 

3,122

 

 

(32,790

)

 

 

(11,355

)

Income before provision for income taxes

 

157,150

 

 

 

79,969

 

 

408,635

 

 

 

130,844

 

Provision for income taxes

 

7,809

 

 

 

6,530

 

 

17,653

 

 

 

10,382

 

Net income

 

149,341

 

 

 

73,439

 

 

390,982

 

 

 

120,462

 

Less: Net income attributable to noncontrolling interests

 

5,816

 

 

 

1,934

 

 

7,801

 

 

 

4,028

 

Net income attributable to common stockholders

$

143,525

 

 

$

71,505

 

$

383,181

 

 

$

116,434

 

Net earnings per share attributable to common stockholders, basic

$

0.06

 

 

$

0.03

 

$

0.17

 

 

$

0.05

 

Net earnings per share attributable to common stockholders, diluted

$

0.06

 

 

$

0.03

 

$

0.16

 

 

$

0.05

 

Weighted-average shares of common stock outstanding used in computing net earnings per share attributable to common stockholders, basic

 

2,250,032

 

 

 

2,162,530

 

 

2,231,790

 

 

 

2,134,045

 

Weighted-average shares of common stock outstanding used in computing net earnings per share attributable to common stockholders, diluted

 

2,459,589

 

 

 

2,325,600

 

 

2,424,864

 

 

 

2,281,347

 

—————

(1)

Includes stock-based compensation expense as follows (in thousands):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

Cost of revenue

$

13,123

 

 

$

7,814

 

$

35,941

 

 

$

24,995

 

Sales and marketing

 

50,698

 

 

 

39,290

 

 

141,168

 

 

 

116,956

 

Research and development

 

30,715

 

 

 

21,952

 

 

87,532

 

 

 

65,068

 

General and administrative

 

47,889

 

 

 

45,324

 

 

145,199

 

 

 

136,276

 

Total stock-based compensation

$

142,425

 

 

$

114,380

 

$

409,840

 

 

$

343,295

 

 

Palantir Technologies Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

As of September 30,

As of December 31,

 

2024

2023

Assets

 

 

Current assets:

 

 

Cash and cash equivalents

$

768,710

 

$

831,047

 

Marketable securities

 

3,795,949

 

 

2,843,132

 

Accounts receivable, net

 

668,110

 

 

364,784

 

Prepaid expenses and other current assets

 

119,193

 

 

99,655

 

Total current assets

 

5,351,962

 

 

4,138,618

 

Property and equipment, net

 

40,345

 

 

47,758

 

Operating lease right-of-use assets

 

211,570

 

 

182,863

 

Other assets

 

164,220

 

 

153,186

 

Total assets

$

5,768,097

 

$

4,522,425

 

Liabilities and Stockholders' Equity

 

 

Current liabilities:

 

 

Accounts payable

$

27,021

 

$

12,122

 

Accrued liabilities

 

265,244

 

 

222,991

 

Deferred revenue

 

236,608

 

 

246,901

 

Customer deposits

 

366,946

 

 

209,828

 

Operating lease liabilities

 

47,637

 

 

54,176

 

Total current liabilities

 

943,456

 

 

746,018

 

Deferred revenue, noncurrent

 

7,825

 

 

28,047

 

Customer deposits, noncurrent

 

3,681

 

 

1,477

 

Operating lease liabilities, noncurrent

 

207,278

 

 

175,216

 

Other noncurrent liabilities

 

14,495

 

 

10,702

 

Total liabilities

 

1,176,735

 

 

961,460

 

Stockholders’ equity:

 

 

Common stock

 

2,270

 

 

2,200

 

Additional paid-in capital

 

9,757,380

 

 

9,122,173

 

Accumulated other comprehensive income, net

 

4,925

 

 

801

 

Accumulated deficit

 

(5,266,432

)

 

(5,649,613

)

Total stockholders’ equity

 

4,498,143

 

 

3,475,561

 

Noncontrolling interests

 

93,219

 

 

85,404

 

Total equity

 

4,591,362

 

 

3,560,965

 

Total liabilities and equity

$

5,768,097

 

 

$

4,522,425

 

 

Palantir Technologies Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Nine Months Ended September 30,

 

2024

2023

Operating activities

 

 

Net income

$

390,982

 

$

120,462

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation and amortization

 

24,581

 

 

25,382

 

Stock-based compensation

 

409,840

 

 

343,295

 

Noncash operating lease expense

 

32,041

 

 

34,810

 

Unrealized and realized (gain) loss from marketable securities, net

 

26,021

 

 

11,810

 

Noncash consideration

 

(34,789

)

 

(34,852

)

Other operating activities

 

19,115

 

 

(13,328

)

Changes in operating assets and liabilities:

 

 

Accounts receivable, net

 

(311,699

)

 

(159,752

)

Prepaid expenses and other current assets

 

(19,547

)

 

(75

)

Other assets

 

4,056

 

 

1,941

 

Accounts payable

 

7,710

 

 

(32,387

)

Accrued liabilities

 

42,149

 

 

2,552

 

Deferred revenue, current and noncurrent

 

(27,117

)

 

64,464

 

Customer deposits, current and noncurrent

 

159,457

 

 

84,272

 

Operating lease liabilities, current and noncurrent

 

(35,205

)

 

(37,767

)

Other noncurrent liabilities

 

5,943

 

 

184

 

Net cash provided by operating activities

 

693,538

 

 

411,011

 

Investing activities

 

 

Purchases of property and equipment

 

(9,528

)

 

(10,254

)

Purchases of marketable securities

 

(3,418,699

)

 

(4,791,670

)

Proceeds from sales and redemption of marketable securities

 

2,451,378

 

 

2,608,898

 

Proceeds from sales of alternative investments

 

—

 

 

51,072

 

Other investing activities

 

(4,000

)

 

—

 

Net cash used in investing activities

 

(980,849

)

 

(2,141,954

)

Financing activities

 

 

Proceeds from the exercise of common stock options

 

270,207

 

 

166,829

 

Repurchases of common stock

 

(45,598

)

 

—

 

Other financing activities

 

91

 

 

778

 

Net cash provided by financing activities

 

224,700

 

 

167,607

 

Effect of foreign exchange on cash, cash equivalents, and restricted cash

 

960

 

 

(2,113

)

Net decrease in cash, cash equivalents, and restricted cash

 

(61,651

)

 

(1,565,449

)

Cash, cash equivalents, and restricted cash - beginning of period

 

850,107

 

 

2,627,335

 

Cash, cash equivalents, and restricted cash - end of period

$

788,456

 

$

1,061,886

 

 

Palantir Technologies Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)

Non-GAAP Reconciliations

Adjusted Income from Operations and Adjusted Operating Margin (in thousands, except percentages)

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2024

2023

2024

2023

Income from operations

$

113,140

 

$

39,983

 

$

299,360

 

$

54,172

 

Add: stock-based compensation

 

142,425

 

 

114,380

 

 

409,840

 

 

343,295

 

Add: employer payroll taxes related to stock-based compensation

 

19,950

 

 

8,909

 

 

46,340

 

 

25,954

 

Adjusted income from operations

$

275,515

 

$

163,272

 

$

755,540

 

$

423,421

 

Adjusted operating margin

 

38

%

 

29

%

 

37

%

 

26

%

 

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (in thousands, except percentages)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

Trailing Twelve Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

2024

Net cash provided by operating activities

$

419,772

 

 

$

133,443

 

 

$

693,538

 

 

$

411,011

 

 

$

994,710

 

Add: cash paid for employer payroll taxes related to stock-based compensation

 

18,756

 

 

 

8,969

 

 

 

47,827

 

 

 

25,015

 

 

 

56,267

 

Less: purchases of property and equipment

 

(3,985

)

 

 

(1,565

)

 

 

(9,528

)

 

 

(10,254

)

 

 

(14,388

)

Adjusted free cash flow

$

434,543

 

 

$

140,847

 

 

$

731,837

 

 

$

425,772

 

 

$

1,036,589

 

Adjusted free cash flow margin

 

60

%

 

 

25

%

 

 

36

%

 

 

26

%

 

 

39

%

 

Adjusted EBITDA and Adjusted EBITDA Margin (in thousands, except percentages)

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2024

2023

2024

2023

Net income attributable to common stockholders

$

143,525

 

$

71,505

 

$

383,181

 

$

116,434

 

Add: net income attributable to noncontrolling interests

 

5,816

 

 

1,934

 

 

7,801

 

 

4,028

 

Less: interest income

 

(52,120

)

 

(36,864

)

 

(142,065

)

 

(88,027

)

Add: other (income) expense, net

 

8,110

 

 

(3,122

)

 

32,790

 

 

11,355

 

Add: provision for income taxes

 

7,809

 

 

6,530

 

 

17,653

 

 

10,382

 

Add: depreciation and amortization

 

8,087

 

 

8,663

 

 

24,581

 

 

25,382

 

Add: stock-based compensation

 

142,425

 

 

114,380

 

 

409,840

 

 

343,295

 

Add: employer payroll taxes related to stock-based compensation

 

19,950

 

 

8,909

 

 

46,340

 

 

25,954

 

Adjusted EBITDA

$

283,602

 

$

171,935

 

$

780,121

 

$

448,803

 

Adjusted EBITDA margin

 

39

%

 

31

%

 

38

%

 

28

%

 

Adjusted Earnings Per Share, Diluted (in thousands, except per share amounts)

 

Three Months Ended September 30,

Nine Months Ended September 30,

 

2024

2023

2024

2023

Net income attributable to common stockholders

$

143,525

 

$

71,505

 

$

383,181

 

$

116,434

 

Add: stock-based compensation

 

142,425

 

 

114,380

 

 

409,840

 

 

343,295

 

Add: employer payroll taxes related to stock-based compensation

 

19,950

 

 

 

8,909

 

 

46,340

 

 

25,954

 

Less: income tax effects and adjustments (1)

 

(64,343

)

 

(39,775

)

 

(179,459

)

 

(103,714

)

Adjusted net income attributable to common stockholders, diluted

$

241,557

 

$

155,019

 

$

659,902

 

$

381,969

 

Weighted-average shares used in computing adjusted earnings per share, diluted

 

2,459,589

 

 

2,325,600

 

 

2,424,864

 

 

2,281,347

 

Adjusted earnings per share, diluted

$

0.10

 

$

0.07

 

$

0.27

 

$

0.17

 

 

———— (1) Income tax effect is based on long-term estimated annual effective tax rates of 23.0% for the periods ended 2024 and 2023.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241104366942/en/

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