• Revenue Growth: 30% year-over-year increase in Q3.

• US Business Revenue Growth: 44% year-over-year and 14% sequential growth.

• US Government Revenue Growth: 40% year-over-year and 15% sequential growth.

• US Commercial Revenue Growth: 54% year-over-year and 13% sequential growth.

• Adjusted Operating Margin: Expanded to 38%.

• Cash from Operations: $420 million.

• Adjusted Free Cash Flow: $435 million, representing a 60% margin.

• Customer Count Growth: 39% year-over-year to 629 customers.

• Net Dollar Retention: 118%, a 400 basis point increase from last quarter.

• GAAP Net Income: $144 million, representing a 20% margin.

• Adjusted Earnings Per Share: $0.10.

• GAAP Earnings Per Share: $0.06.

• Cash and Equivalents: $4.6 billion at the end of the quarter.

• Q4 2024 Revenue Guidance: Between $767 million and $771 million.

• Full Year 2024 Revenue Guidance: Raised to between $2.805 billion and $2.809 billion.

• Warning! GuruFocus has detected 6 Warning Signs with PLTR.

Release Date: November 04, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Palantir Technologies Inc (NYSE:PLTR) reported a 30% year-over-year revenue growth in Q3, exceeding prior guidance.

• The US business saw a significant 44% year-over-year revenue growth, driven by increased AI demand.

• The company achieved a 38% adjusted operating margin, marking the eighth consecutive quarter of expanding margins.

• Palantir Technologies Inc (NYSE:PLTR) generated over $1 billion in adjusted free cash flow on a trailing 12-month basis for the first time.

• The company was added to the S&P 500, highlighting its growth, profitability, and market leadership.

Negative Points

• International commercial revenue grew only 3% year over year, with a 7% sequential decline due to headwinds in Europe and the Middle East.

• Revenue from strategic commercial contracts is expected to decline significantly in Q4 2024.

• The company faces challenges in maintaining growth amidst macroeconomic uncertainties.

• Despite strong US growth, international government revenue saw a 5% sequential decline.

• There is a potential risk of accelerated stock-based compensation expenses if market-based vesting criteria are achieved earlier than expected.

Q & A Highlights

Q: How will Palantir differentiate its AI offerings from others, including the model creators, and how is AIP different? A: Shyam Sankar, Chief Technology Officer, explained that while AI models are improving, they are also becoming more similar, and the cost of inference is dropping. Palantir's differentiation lies in its decade-long head start in building AI applications at scale, focusing on the ontology to drive AIP across applications. Alexander Karp, CEO, added that Palantir's ability to extract value from large language models in enterprise contexts is a key differentiator, as many clients have been skeptical about the practical utility of these models.