Palantir has delivered a blockbuster first quarter, with revenue up 85% year-on-year to $1.63bn, the company’s highest growth rate on record, prompting another upgrade to full-year guidance.
The US business is the key driver of growth, more than doubling year-on-year to $1.28bn, with US commercial jumping 133% to $595m. Business from the US government rose 84% to $687m.
Palantir closed 206 deals of $1m or more in the quarter, including 47 above $10m.
“Palantir delivered another strong quarter, with demand for its AI platform continuing to accelerate across both commercial customers and government agencies, said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
Total contract value reached $2.41bn, up 61%, and US commercial remaining deal value sits at $4.92bn, more than double a year ago, pointing to a healthy revenue runway.
But it’s not just a revenue growth story. Palantir is successfully converting top-line growth into profits. GAAP operating margin came in at 46%, with adjusted operating margin of 60% and adjusted free cash flow margin of 57%.
The outlook should be encouraging for investors. Full-year revenue guidance has been lifted to $7.65bn–$7.66bn, implying around 71% growth and ten points ahead of the previous quarter’s outlook.
US commercial revenue guidance has been raised to at least $3.22bn, representing a significant share of the year’s forecast revenue. Q2 is guided to revenue of $1.80bn-ish, with adjusted operating income of around $1.06bn.
“The key point is that this growth is not just about companies testing AI in small pockets – Palantir is increasingly being used in real-world operations, where the stakes are high, and customers need AI to deliver clear, measurable results,” Matt Britzman said.
“Management struck a very confident tone, pointing to strong US demand, expanding customer commitments and a sharp uplift in full-year guidance. That all supports the idea that Palantir has become one of the clearest ways to play the shift from AI hype to implementation.”
The ‘hype’ Britzman alludes to is still evident in Palantir shares, which value the company at $350bn – an eye-watering valuation on earnings and sales multiples. For now, however, Palantir’s innovative offering and promise of future growth are proving sufficient to support the shares.