Palantir Technologies Inc. (PLTR) Q3 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows strong financial performance with significant revenue growth, especially in U.S. commercial sectors, and increased guidance across various financial metrics. The share repurchase program and robust free cash flow are positive indicators for shareholder returns. Although competitive pressures and regulatory issues pose risks, the overall sentiment is positive. The Q&A session highlighted rapid customer conversions and strong government partnerships, reinforcing growth prospects. The market is likely to react positively, with a stock price increase of 2% to 8% over the next two weeks.
Key Financial Performance
Revenue $726 million, up 30% year-over-year; driven by increased AI demand and strong performance in U.S. business, which grew 44% year-over-year.
U.S. Commercial Revenue $179 million, up 54% year-over-year and 13% sequentially; fueled by unprecedented demand and successful deployment of AI models.
U.S. Government Revenue $320 million, up 40% year-over-year and 15% sequentially; growth driven by execution in existing programs and favorable deal timing.
Adjusted Operating Margin 38%, marking the eighth consecutive quarter of expanding margins; reflects strong unit economics.
Rule of 40 Score 68, a 4 point increase from the previous quarter; indicates a combination of revenue growth and profitability.
Cash from Operations $420 million, representing a margin of 58%; highlights strong cash generation capabilities.
Adjusted Free Cash Flow $435 million, representing a margin of 60%; reflects effective cash management.
Trailing 12-Month Adjusted Free Cash Flow Over $1 billion for the first time in company history, representing a margin of 39%; signifies strong cash flow generation.
Customer Count 629 customers, up 39% year-over-year; indicates strong customer acquisition and retention.
International Commercial Revenue $138 million, up 3% year-over-year but down 7% sequentially; impacted by headwinds in Europe.
Total Contract Value (TCV) Booked $1.1 billion, up 33% year-over-year and 16% sequentially; reflects strong demand across segments.
Net Dollar Retention 118%, an increase of 400 basis points from last quarter; driven by expansions at existing customers.
Remaining Performance Obligations (RPO) $1.6 billion, up 59% year-over-year; indicates strong future revenue visibility.
Adjusted Gross Margin 82%; reflects strong profitability in operations.
GAAP Operating Income $113 million, representing a 16% margin; indicates solid operational performance.
GAAP Net Income $144 million, representing a 20% margin; highlights overall profitability.
Adjusted Earnings Per Share $0.10; reflects strong earnings performance.
GAAP Earnings Per Share $0.06; indicates profitability on a GAAP basis.
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Operating Highlights
AIP Implementation: AIP has helped automate key underwriting workflows for a leading global insurance organization, reducing the typical underwriting response time from over two weeks to 3 hours.
Maven Smart System: Palantir signed a new five-year contract to expand Maven Smart system AI ML capabilities across the U.S. military services.
Developer Platform Expansion: Released JADC2 SDK for government and third-party developers to start building applications.
S&P 500 Inclusion: Palantir was added to the S&P 500 index, reflecting exceptional growth and market leadership.
U.S. Government Revenue Growth: U.S. government business revenue grew 40% year-over-year, marking the strongest growth in 15 quarters.
U.S. Commercial Revenue Growth: U.S. commercial business revenue grew 54% year-over-year, indicating strong market positioning.
Operational Efficiency: Implemented over 10 business use cases at Associated Materials, increasing on-time delivery rates from 40% to 90%.
Cash Flow Performance: Generated $420 million in cash from operations and $435 million in adjusted free cash flow, representing margins of 58% and 60% respectively.
Strategic Partnerships: Palantir is partnering with defense tech startups and established integrators like L3Harris to enhance market access.
Investment in AI Technologies: Continued investment in AIP and technical talent to maintain competitive edge amidst AI revolution.
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Risk or Challenges
Competitive Pressures: The AI market is experiencing rapid commoditization, with models becoming more similar and pricing for inference dropping significantly. This creates a competitive landscape where companies must differentiate themselves through application and workflow layers rather than just model supply.
Regulatory Issues: There are ongoing concerns regarding the ability to securely manage government data, which necessitates robust technological solutions to ensure compliance and safety in operations.
Supply Chain Challenges: The company is focused on reindustrialization to prevent escalating conflict and regain deterrence, indicating potential supply chain vulnerabilities in defense and technology sectors.
Economic Factors: The company is navigating macroeconomic challenges while maintaining profitability and expanding margins, indicating a need for careful financial management amidst economic uncertainties.
Customer Acquisition: The rapid conversion of customers from boot camps to significant contracts suggests a need for sustained customer engagement and support to maintain growth momentum.
Investment in AI Technologies: While investing heavily in AI technologies, the company must balance these investments with profitability and operating margins, which could pose a risk if not managed effectively.
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Guidance & Outlook
Revenue Growth: Revenue grew 30% year-over-year in Q3, with U.S. business achieving 44% year-over-year growth.
AI Deployment: Focused on deploying AI models in production to leverage advancements in AI.
Customer Expansion: Closed 104 deals over $1 million, with customer count growing 77% year-over-year in U.S. Commercial.
Government Contracts: Signed a new five-year contract to expand AI capabilities across U.S. military services.
AIP Development: Continued investment in AIP as a developer platform, with significant applications built by military personnel.
Strategic Partnerships: Partnering with defense tech startups and established integrators to enhance market access.
Q4 2024 Revenue Guidance: Expect revenue of between $767 million and $771 million.
Full Year 2024 Revenue Guidance: Raising guidance to between $2.805 billion and $2.809 billion.
U.S. Commercial Revenue Guidance: Raising guidance to an excess of $687 million, representing at least 50% growth.
Adjusted Income from Operations Guidance: Raising guidance to between $1.054 billion and $1.058 billion.
Adjusted Free Cash Flow Guidance: Raising guidance to an excess of $1 billion.
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Shareholder Return Plan
Share Repurchase Program: In the third quarter, Palantir repurchased approximately 1.8 million shares as part of its share repurchase program. As of the end of the quarter, there remains $954 million of the original authorization.
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Key Q&A
Q:How will Palantir differentiate its AI offerings from others, including the model creators?
A:Shyam Sankar explained that while AI models are improving, they are also becoming more similar, and the real value lies in the application and workflow layer, where Palantir has a decade-long head start. The focus is on delivering AI applications at scale throughout the enterprise.
Q:As Palantir continues to invest in new AI technologies and expand globally, how are you balancing these investments with maintaining or improving profitability and operating margins?
A:David Glazer stated that Palantir is excelling, with revenue growth of 30% year-over-year and expanding margins. They are raising guidance for adjusted free cash flow and operating income while continuing to invest in AI.
Q:With boot camp conversions, has it surprised you just how quickly from a customer coming into a boot camp to conversion to megadeals?
A:David Glazer noted that the results show a 44% year-over-year growth in U.S. Commercial, with customers moving quickly from boot camps to significant deals, indicating a strong demand for AI.
Q:What change for them to actually want a partner?
A:Ryan Taylor mentioned that the acceleration in partnerships is due to the mission manager, which helps partners service their existing revenue more profitably and expand market access.
Q:Can you give an update on the strategic commercial contracts?
A:David Glazer stated that strategic commercial contracts are a tiny part of the business, representing about 1% of revenue in Q3, and are not relevant moving forward.
Q:Review of Unclear Management Responses
A:Management appeared to avoid giving a direct answer regarding the specifics of how they plan to maintain their competitive edge in the AI market, as the response was somewhat vague and did not provide detailed strategies or metrics.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI demand
AI economy
AI have
AI model
AI revolution
Ake others
America ally
Commercial TCV
Government
Maven
Palantirians
SP
adoption
boot camp
client
cognition
commodity
cycle
decision
developer
form
have nots
hour
industry
insurance
language model
model production
ontology
price
process
product government
program
progress
prototype production
response
score cash
skepticism
targeting
underwriting
weapon
PLTR Transcript
Palantir Technologies Inc. (PLTR) Q3 2025 Earnings Call Transcript
Positive11-4
Palantir's earnings call reveals robust financial performance with a 63% YoY revenue growth and a record operating margin. The company raised its revenue and free cash flow guidance, indicating strong confidence in future performance. The share repurchase program and impressive contract value growth further boost sentiment. Despite some vague responses in the Q&A, the overall positive financial metrics and optimistic guidance suggest a strong positive stock reaction.
Palantir Technologies Inc. (PLTR) Q2 2025 Earnings Call Transcript
Positive8-4
The earnings call indicates robust financial growth across all sectors, highlighted by record revenues, contract values, and customer expansion. The positive Q&A responses reinforce confidence in Palantir's strategic direction and market position. Raised guidance and strong cash flow further support the optimistic outlook. The absence of negative sentiment or unclear responses, coupled with a significant partnership announcement, positions the stock for a strong positive reaction.
Palantir Technologies Inc. (PLTR) Q1 2025 Earnings Call Transcript
Positive5-5
Palantir's earnings call shows strong financial performance with significant revenue growth, especially in the US market, and improved margins. The share repurchase program also indicates confidence in the company's valuation. Despite risks in international markets, the overall sentiment is positive due to robust demand and future revenue potential. The Q&A section reveals optimism about competitive positioning and potential opportunities, although some responses were unclear. Considering these factors, the stock is likely to experience a positive movement over the next two weeks.
Palantir Technologies Inc. (PLTR) Q3 2024 Earnings Call Transcript
Positive11-5
The earnings call summary shows strong financial performance with significant revenue growth, especially in U.S. commercial sectors, and increased guidance across various financial metrics. The share repurchase program and robust free cash flow are positive indicators for shareholder returns. Although competitive pressures and regulatory issues pose risks, the overall sentiment is positive. The Q&A session highlighted rapid customer conversions and strong government partnerships, reinforcing growth prospects. The market is likely to react positively, with a stock price increase of 2% to 8% over the next two weeks.
PLTR Slides
PLTR Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
