Palantir Technologies Inc. (PLTR) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
U.S. commercial revenue growth 93% year-over-year and 20% sequential growth. This acceleration is attributed to the increasing demand for AI production use cases and expansions at existing customers.
U.S. government revenue growth 53% year-over-year and 14% sequential growth. This growth was driven by the impact of AI and government software offerings, including new awards and execution in existing programs.
Overall U.S. business revenue growth 68% year-over-year and 17% sequentially. This growth reflects the strong performance in both commercial and government sectors in the U.S.
Overall revenue growth 48% year-over-year growth in Q2, surpassing $1 billion in quarterly revenue for the first time. This growth is attributed to the increasing adoption of AI and strong performance across sectors.
Rule of 40 score 94% in Q2, up 11 points quarter-over-quarter. This increase reflects the company's strong revenue growth and profitability.
Total Contract Value (TCV) $2.3 billion in Q2, the highest ever, representing 140% year-over-year growth. This was driven by strong demand for AI solutions and expansions with existing customers.
Annual Contract Value (ACV) $684 million in Q2, the highest ever. This reflects the increasing adoption of AI solutions and expansions with existing customers.
Top 20 customers' average trailing 12-month revenue $75 million per customer, up 30% year-over-year. This increase is due to expansions and higher spending by top customers.
Adjusted free cash flow $569 million in Q2, representing a margin of 57%. This reflects strong cash generation and operational efficiency.
Adjusted operating margin 46% in Q2, exceeding prior guidance by nearly 300 basis points. This was driven by strong revenue growth and cost management.
Customer count 849 customers, up 43% year-over-year and 10% sequentially. This growth reflects the increasing adoption of Palantir's solutions.
Net dollar retention 128%, an increase of 400 basis points from last quarter. This was driven by expansions at existing customers and new customer acquisitions.
Remaining deal value $7.1 billion, up 65% year-over-year and 20% sequentially. This reflects strong demand and a growing pipeline of contracts.
Remaining performance obligations (RPO) $2.4 billion, up 77% year-over-year and 27% sequentially. This increase is due to new contracts and expansions.
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Operating Highlights
AI-driven Ontology and AIP: Palantir's ontology and AIP (Artificial Intelligence Platform) are enabling enterprises to build software faster and more effectively, with significant adoption across industries. For example, Lear Corporation extended its use of Foundry and AIP to support over 11,000 users and 175 use cases.
Healthcare and Telecom Solutions: Palantir's AI solutions are driving significant operational improvements, such as reducing patient onboarding time and uncovering fraud in seconds. A healthcare company signed an $88 million deal to automate patient care coordination.
Warp Speed Manufacturing System: The Warp Speed system, built on AIP, is transforming manufacturing processes, reducing production line balancing time from one day to one hour.
U.S. Commercial Market Growth: U.S. commercial revenue grew 93% year-over-year, driven by AI production use cases. The U.S. commercial segment now represents 31% of total revenue, up from 23% a year ago.
Government Contracts: Palantir secured a 10-year, $10 billion enterprise agreement with the U.S. Army and a $218 million delivery order from the U.S. Space Force. The U.S. government business grew 53% year-over-year.
Revenue Growth: Palantir achieved $1 billion in quarterly revenue for the first time, with 48% year-over-year growth. The Rule of 40 score reached 94%, reflecting strong operational efficiency.
Customer Expansion: The top 20 customers now average $75 million in trailing 12-month revenue, a 30% increase year-over-year. Palantir closed 157 deals worth $1 million or more in Q2.
Focus on AI Revolution: Palantir is positioning itself as a leader in AI-driven enterprise solutions, emphasizing its unique ontology and AI capabilities to deliver value across industries.
Blue-Collar AI Empowerment: The company is focusing on empowering blue-collar workers with AI tools to enhance productivity and earnings, reflecting a strategic shift towards broader workforce inclusion.
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Risk or Challenges
Market Conditions: The company faces challenges in international commercial revenue, which declined 3% year-over-year and grew only 2% sequentially. This indicates potential difficulties in maintaining growth outside the U.S. market.
Regulatory Hurdles: The company acknowledges that forward-looking statements are subject to risks and uncertainties, which could cause them to differ materially from actual results. This implies potential regulatory or compliance risks.
Economic Uncertainties: The company’s reliance on U.S. government contracts, such as the $10 billion Army contract, exposes it to risks related to changes in government budgets or priorities, which could impact future revenue.
Strategic Execution Risks: The company’s ambitious growth targets and heavy investment in AI and technical hiring could strain resources and operational efficiency, potentially impacting profitability.
Supply Chain Disruptions: The company highlighted challenges in U.S. shipbuilding and the maritime industrial base, which could affect its ability to deliver on defense-related contracts.
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Guidance & Outlook
Q3 2025 Revenue Guidance: Palantir expects revenue of between $1.083 billion and $1.087 billion, representing over 8% growth quarter-over-quarter and 50% growth year-over-year.
Full Year 2025 Revenue Guidance: The company is raising its revenue guidance to between $4.142 billion and $4.150 billion, representing a 45% year-over-year growth rate.
U.S. Commercial Revenue Guidance: Palantir is raising its U.S. commercial revenue guidance to an excess of $1.302 billion, representing a growth rate of at least 85%.
Adjusted Income from Operations Guidance: For full year 2025, Palantir is raising its adjusted income from operations guidance to between $1.912 billion and $1.920 billion.
Adjusted Free Cash Flow Guidance: The company is raising its adjusted free cash flow guidance to between $1.8 billion and $2 billion for full year 2025.
GAAP Profitability: Palantir continues to expect GAAP operating income and net income in each quarter of 2025.
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Shareholder Return Plan
Share Repurchase Program: Through the end of the second quarter, we repurchased approximately 2.5 million shares as part of our share repurchase program. As of the end of the quarter, we had $899 million remaining of the original authorization.
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Key Q&A
Q:How is Palantir making AI more useful for frontline workers and decision makers, not just data scientists?
A:Palantir focuses on empowering frontline workers by providing AI tools that enhance their productivity and creativity. Examples include nurses in ICUs spending more time with patients, factory workers in the submarine industrial base saving time, and Panasonic Energy workers using AI to manage high-end technology. Palantir also supports the American tech fellowship to train and credential blue-collar workers to build AI applications.
Q:Are you planning to establish a direct sales force given your growth and success without one?
A:Palantir has historically avoided a traditional direct sales force, relying instead on customer referrals and credibility. While they have a small, nimble sales team, their primary strategy is to let current customers advocate for them. They believe this approach builds trust and credibility, leading to higher adoption rates and value creation.
Q:What excites you most about the AI action plan from the White House, and where do you see room for improvement?
A:The AI action plan excites Palantir because it removes barriers and emphasizes implementation, fostering an American open AI tech stack. They believe the industry and its customers are eager to realize the value of AI. However, they see room for improvement in focusing more on action rather than theoretical discussions.
Q:How does Palantir ensure it attracts and retains top talent amidst competition in the software industry?
A:Palantir attracts and retains talent by offering opportunities to work on meaningful problems with real-world impact. They emphasize quick integration into impactful projects and provide a unique credentialing system that values contributions at Palantir over traditional academic or social backgrounds. This approach fosters a sense of agency and pride among employees.
Q:Is there anything you'd like to say to individual investors before ending the call?
A:Alexander Karp expressed gratitude to individual investors for their support, emphasizing their role in Palantir's success. He highlighted the company's commitment to its values and its impact on the world, while also acknowledging the hard work and dedication of Palantir employees.
Q:Review of Unclear Management Responses
A:No questions were identified where management avoided giving a direct answer or lacked clarity in their responses.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI FDE
AI production
CEOs
Co
Glazer
Maven Smart
Officer Sankar
Research Division
Rule score
Securities
Smart System
Space
TCV ACV
TCV booking
Warp Speed
building block
care
contract TCV
error
fraud
human
integration
loop
million
patient
problem
rate point
reality LLMs
realization
start
task
understanding
usage
war
worker
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.
