Palantir's quarterly revenue jumps 96%, but commercial deal volume slows

Palantir, the US data analytics and artificial intelligence software company, published its third-quarter results on Monday, showing revenue up 96% year over year at $2.31 billion. It is the first time quarterly revenue has topped the $2 billion mark. Despite the strong figures, the stock traded slightly lower on Tuesday as investors questioned the pace of the company's main growth engine: large enterprise customers.

Results beat forecasts

Revenue rose 20% from the previous quarter and exceeded analysts' expectations of $2.18 billion. Adjusted earnings per share came in at $0.44, against a forecast of $0.41. The company also raised its full-year revenue guidance.

For the first time, U.S. commercial revenue surpassed U.S. government revenue: commercial contracts brought in $984 million (up 148% from a year earlier), compared with $953 million from the government. Enterprises are turning to Palantir's AI software because it can run frontier models and custom-train open-weight models without sharing data and business processes with outside AI labs. Customers also get help from the company's forward-deployed engineers, who work directly with them.

A cautionary signal

CEO Alex Karp told analysts on the quarterly conference call that commercial deals are being closed faster, with shorter contract durations, but can be expanded dramatically. In practice, that means customers try the software quickly but may also cancel more easily.

Total contract value from U.S. enterprises was $1.46 billion in the quarter, down from a record $2.13 billion in the previous one, which suggests slowing sales. The next report should show whether Palantir has established itself as a rising enterprise AI provider in the U.S.; historically, many companies sign their biggest tech purchases in the final quarter of the year. The company raised its U.S. commercial revenue guidance to more than $3.559 billion, a growth rate of at least 143%.