Palantir Delivers Record Profit and Raises Guidance Amid Surging AI Demand
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Palantir Technologies, Inc. (NYSE:PLTR) 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.
This article first appeared on GuruFocus.