Palantir continues to land US commercial accounts as it raised its outlook for the second quarter and 2025.
The company reported first quarter non-GAAP earnings of 13 cents a share on revenue of $883.86 million, up 39% from a year ago. GAAP earnings for the first quarter were 8 cents a share. Wall Street was expecting Palantir to report first quarter earnings of 13 cents a share on revenue of $862.13 million.
Palantir CEO Alex Karp said the company is projecting 2025 US commercial revenue growth of 68% and total revenue growth of 36%. Karp said, "we are delivering the operating system for the modern enterprise in the era of AI" and there is a "a tectonic shift in the adoption of our software."
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On a Rule of 40 score basis, Palantir scored 83% in the first quarter. Rule of 40 is a SaaS financial metric that dictates a healthy SaaS company should have a combined growth rate and profit margin of 40% or more.
As for the outlook, Palantir projected second quarter revenue between $934 million to $938 million with adjusted income from operations between $401 million and $405 million. For 2025, Palantir projected revenue of $3.89 billion to $3.902 billion with adjusted income from operations between $1.711 billion to $1.723 billion.
The numbers for the first quarter were impressive.
- US revenue was up 55% in the first quarter compared to a year ago to $628 million.
- US commercial revenue was up 71% to $255 million. US government revenue was up 45% to $373 million.
- The company closed 139 deals of at least $1 million, 51 deals of at least $5 million and 31 deals of at least $10 million.
In his shareholder letter Karp noted the following:
- Management: "This breed of company will never spring from the mind of a committee; it would never have been permitted to endure in its current form, with thousands of employees organizing themselves around problems at hand, if we had submitted to the conventional managerial model in American corporate life."
- US government spending: "Our software systems for planning and executing special forces and other military operations, and for assessing and selecting targets, has been embraced by the American defense sector."
- AI and LLMs: "The rush towards large language models, as well as the foundational software architecture that is capable of making them valuable to large organizations, has turned into a stampede. What was once a relatively orderly process of assessment and evaluation of these novel technologies has evolved into a ravenous whirlwind of adoption as an increasing number of institutions grasp the magnitude of the shift that is washing over industry and government."
