Palantir Technologies Inc. (PLTR) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $884 million, a 39% year-over-year increase, driven by strong demand for AIP and growth in both US commercial and government sectors.
US Revenue $628 million, a 55% year-over-year increase, attributed to the strong performance in the US commercial business and government contracts.
US Commercial Revenue $397 million, a 33% year-over-year increase, with a notable 71% growth year-over-year in the US commercial segment, driven by new customer conversions and expansions.
Adjusted Operating Margin 44%, an 800 basis point increase year-over-year, reflecting improved revenue and profitability.
Adjusted Free Cash Flow $370 million, representing a margin of 42%, indicating strong cash generation capabilities.
Net Dollar Retention 124%, an increase of 400 basis points year-over-year, driven by expansions at existing customers and new customer acquisitions.
Customer Count 769 customers, a 39% year-over-year increase, reflecting the growing demand for Palantir's services.
Total Remaining Deal Value $5.97 billion, a 45% year-over-year increase, indicating strong future revenue potential.
GAAP Operating Income $176 million, representing a 20% margin, showcasing profitability despite significant investments.
GAAP Net Income $214 million, representing a 24% margin, highlighting overall financial health.
Earnings Per Share (EPS) $0.08 GAAP EPS and $0.13 adjusted EPS, reflecting strong earnings performance.
International Commercial Revenue $141 million, a 5% year-over-year decline, attributed to headwinds in Europe and a one-time revenue catchup in Q4 2024.
Government Revenue $487 million, a 45% year-over-year increase, driven by execution in existing programs and new awards.
Total Contract Value (TCV) Booked $1.5 billion in government TCV, up 66% year-over-year, indicating strong demand for government contracts.
Adjusted Gross Margin 82%, reflecting operational efficiency and cost management.
Adjusted Income from Operations $391 million, representing a strong operational performance.
Commercial TCV Bookings $930 million, representing 84% growth year-over-year, indicating strong demand for commercial contracts.
Remaining Performance Obligations (RPO) $1.9 billion, a 46% year-over-year increase, indicating strong future revenue potential.
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Operating Highlights
AIP Product Development: AIP has entered the next phase of product development and adoption focused on enterprise autonomy, enabling customers to build and deploy AI agents that automate enterprise functions.
Healthcare Automation Solutions: Partnering with R1 RCM to develop intelligent automation solutions for healthcare reimbursement, targeting a multi-$100 billion opportunity.
Maven Smart System: Maven Smart System adoption has doubled, expanding its use across combatant commands and NATO.
US Commercial Revenue Growth: US commercial revenue grew 71% year-over-year, surpassing $1 billion annual run rate for the first time.
International Market Focus: Continued focus on targeted growth opportunities in Asia and the Middle East, while facing headwinds in Europe.
Operational Efficiency: Adjusted operating margin increased to 44%, with a rule of 40 score rising to 83%.
Customer Growth: Customer count grew 39% year-over-year, with significant expansions in existing customer accounts.
Strategic Partnerships: Partnerships with major companies like Citibank, BP, and L3Harris, highlighting the transformative impact of Palantir's software.
Government Contracts: Closed significant deals with the Department of Defense and NATO, expanding government business.
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Risk or Challenges
Competitive Pressures: There is a recognition that large language models are becoming commodities, which may impact the competitive landscape. The company emphasizes the need to differentiate through its ontology and Foundry software.
Regulatory Issues: There is necessary pressure on the system to root out fraud and abuse within the US government, which could lead to increased scrutiny and regulatory challenges.
Supply Chain Challenges: The company mentions targeting supply chain opportunities, indicating potential challenges in supply chain management that could affect operations.
Economic Factors: Organizations may consider curtailing spending to drive efficiencies or weather heightened volatility, which could impact demand for Palantir's services.
International Market Risks: The company faces headwinds in Europe, which has shown a decline in revenue, indicating potential risks in international markets.
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Guidance & Outlook
US Revenue Growth: US revenue grew 55% year-over-year, with commercial revenue growing 71% year-over-year.
AIP Demand: Unrelenting demand for AIP continues to drive outperformance despite Q1 being historically slow.
Customer Engagement: Closed $810 million in US commercial TCV with a 239% year-over-year growth rate.
Partnerships: Partnering with R1 RCM to develop intelligent automation solutions in healthcare.
Maven Smart System: Adoption continues to grow, with significant expansion in the Department of Defense and NATO.
Q2 2025 Revenue Guidance: Expect revenue of between $934 million and $938 million.
Full Year 2025 Revenue Guidance: Raising guidance to between $3.89 billion and $3.902 billion, representing a growth rate of 36% year-over-year.
US Commercial Revenue Guidance: Raising guidance to an excess of $1.178 billion, representing a growth rate of at least 68%.
Adjusted Income from Operations Guidance: Raising guidance to between $1.711 billion and $1.723 billion.
Adjusted Free Cash Flow Guidance: Raising guidance to between $1.6 billion and $1.8 billion.
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Shareholder Return Plan
Share Repurchase Program: In the first quarter, Palantir repurchased approximately 2.3 million shares as part of their share repurchase program. As of the end of the quarter, there is $918 million remaining of the original authorization.
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Key Q&A
Q:How does Palantir plan to sustain its competitive advantage in AI, particularly in light of growing competition?
A:Our advantage comes down to ontology. It's really an advantage on the AI demand side, and that has positioned AIP to be the platform that is able to capture the ever-expanding capability of the raw LLMs and turn that into business value.
Q:How will the current US administration's focus on reducing federal spend as well as the February announcement of US Department of Defense budget cuts impact current contracts as well as future contract acquisition?
A:We welcome DOGE. We believe deeply in the actual value that our software is creating, both on an absolute basis and on a relative basis to the traditional labor based cost plus model that has failed to deliver for the American people.
Q:Isn't that another opportunity where you could actually gain more share of budgets as you go to more meritocracy?
A:We're very optimistic about what we're going to do in the US, but the devil's in the details. We predict we're going to do very, very well.
Q:Are you interested in applying Warp Speed as these European countries build up their own defenses?
A:We would love to help Europe on the manufacturing challenges around rearmament, and I think there are a lot of them to do.
Q:Where else do you have opportunities for software to add value?
A:There's some classified projects that we have as well where the first step to building the hardware is not to build the hardware. It's actually to build the mission payload and the software that can execute the thing.
Q:Review of Unclear Management Responses
A:Management's responses lacked clarity on the impact of the US administration's budget cuts on future contracts, as well as the specifics of how they plan to apply Warp Speed in Europe.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ACV
AI agent
AI demand
AIG
AIP outperformance
BP
Department Defense
Maven Smart
NATO
Smart System
TCV booking
adoption
agent AI
battle
call
command
demand AI
efficiency
engagement month
enterprise autonomy
exceptionalism
executive
healthcare
human AI
increase rule
intelligence
organization
outcome
picture
product development
rule score
run rate
sector AI
state
supply chain
user
volatility
workflow
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.
