Palantir Technologies Inc. (PLTR) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Overall Revenue Grew 63% year-over-year and 18% sequentially. This growth was driven by strong execution in the U.S., which accounted for 3/4 of the business in Q3, growing 77% year-over-year and 20% sequentially.
Rule of 40 Score Soared to 114%, up 4 points year-over-year and 20 points sequentially. This reflects the company's strong revenue growth and profitability.
U.S. Commercial Business Revenue Grew 121% year-over-year and 29% sequentially. This was driven by high demand and the adoption of AIP across operations.
Total Contract Value (TCV) Closed at $2.8 billion, up 151% year-over-year. This includes 204 deals worth $1 million or more, with 91 deals worth $5 million or more and 53 deals worth $10 million or more.
U.S. Government Business Revenue Grew 52% year-over-year and 14% sequentially. This growth was attributed to delivering mission-critical capabilities and supporting the U.S. government.
Adjusted Operating Margin Achieved 51%, the highest ever reported, exceeding prior guidance by 500 basis points. This highlights the unit economics of the business at scale.
Adjusted Free Cash Flow Generated $2 billion on a trailing 12-month basis for the first time in the company's history.
Customer Count Grew 45% year-over-year and 7% sequentially to 911 customers. This reflects the company's expanding customer base.
Commercial Revenue Grew 73% year-over-year and 22% sequentially to $548 million. This marks the fourth consecutive quarter where commercial revenue exceeded U.S. government business revenue.
International Commercial Revenue Grew 10% year-over-year and 5% sequentially to $152 million. Growth was focused on targeted opportunities in Asia, the Middle East, and beyond.
Government Revenue Grew 55% year-over-year and 14% sequentially to $633 million. This was driven by execution in existing programs and new awards.
Net Dollar Retention Increased to 134%, up 600 basis points from last quarter. This was driven by expansions of existing customers and new customer acquisitions.
Remaining Deal Value Increased 91% year-over-year and 21% sequentially to $8.6 billion. This reflects the company's growing pipeline of business.
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Operating Highlights
AIP (Artificial Intelligence Platform): AIP is driving transformational impact in enterprise AI, with customers scaling its use across operations. It is the only platform delivering compounding AI leverage for enterprises.
AI Hivemind: A new AIP capability that dynamically generates agents for problem-solving, idea generation, and proposal execution. It has been used in both commercial and government sectors for tasks like supply chain optimization and mission planning.
Edge Ontology: A lightweight implementation of ontology for mobile devices, enabling mobile applications and embedded software for hardware like drones and robots.
U.S. Commercial Business: Revenue grew 121% year-over-year and 29% sequentially, driven by demand for AIP. Total contract value (TCV) reached $1.3 billion, a 6x year-over-year growth.
U.S. Government Business: Revenue grew 52% year-over-year and 14% sequentially, with continued focus on delivering advanced defense capabilities.
International Commercial Business: Revenue grew 10% year-over-year and 5% sequentially, with targeted growth in Asia and the Middle East.
Revenue Growth: Overall revenue grew 63% year-over-year and 18% sequentially, with a Rule of 40 score of 114%.
Profitability: Achieved highest-ever adjusted operating margin of 51% and generated $2 billion in trailing 12-month adjusted free cash flow.
Customer Expansion: Customer count grew 45% year-over-year to 911 customers, with significant expansions in top 20 customer revenue.
AI Adoption: AI is becoming a strategic imperative at the C-suite level, with companies pursuing enterprise-wide AI transformations.
Reindustrialization: Investments in programs like Warp Speed and the American Tech Fellowship are supporting U.S. manufacturing and workforce development.
U.S. Army Directive: The U.S. Army has directed all organizations to consolidate on Vantage, a platform built on Foundry and AIP, enabling data-driven decision-making.
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Risk or Challenges
Market Conditions: The company highlighted stagnant growth in Europe, which is a significant part of their business. This could pose a challenge to overall revenue growth if not addressed.
Competitive Pressures: The CEO emphasized the company's unique position in the AI market, but also acknowledged the need to maintain their lead in a highly competitive and rapidly evolving industry.
Regulatory Hurdles: No explicit mention of regulatory challenges was made in the transcript.
Supply Chain Disruptions: No explicit mention of supply chain disruptions was made in the transcript.
Economic Uncertainties: The transcript did not explicitly discuss economic uncertainties, but the focus on U.S. growth and stagnant European performance may imply concerns about regional economic conditions.
Strategic Execution Risks: The company is heavily reliant on its U.S. market for growth, with 77% year-over-year growth in the U.S. but stagnant performance in Europe. This geographic concentration could pose risks if U.S. growth slows. Additionally, the company’s reliance on AI-driven solutions requires continuous innovation to maintain its competitive edge.
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Guidance & Outlook
Q4 2025 Revenue Guidance: The company expects revenue of between $1.327 billion and $1.331 billion for the fourth quarter of 2025.
Full Year 2025 Revenue Guidance: The company is raising its full-year revenue guidance to between $4.396 billion and $4.400 billion, representing a 53% year-over-year growth rate.
U.S. Commercial Revenue Guidance: The company is raising its full-year U.S. commercial revenue guidance to exceed $1.433 billion, representing a growth rate of at least 104% year-over-year.
Adjusted Income from Operations Guidance: The company is raising its adjusted income from operations guidance to between $2.151 billion and $2.155 billion for the full year 2025.
Adjusted Free Cash Flow Guidance: The company is raising its adjusted free cash flow guidance to between $1.9 billion and $2.1 billion for the full year 2025.
GAAP Profitability: The company 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 third quarter, we repurchased approximately 2.6 million shares as part of our share repurchase program. As of the end of the quarter, we have $880 million remaining of the original authorization.
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Key Q&A
Q:What do you see as Palantir's unique differentiator that others may not understand?
A:Palantir's unique differentiator lies in its ability to build software that works for the real world, not an idealized version of it. The company focuses on solving problems rather than just selling software. Over two decades, Palantir has developed a software stack that includes the ontology, AI Hivemind, and AI FDE, which are prerequisites for leveraging LLMs in enterprises. Their approach involves tackling the most complex and valuable problems, ensuring their products remain relevant and effective.
Q:Can you walk through the accelerated sales cycles you're seeing from companies attending boot camps?
A:Palantir closed $1.3 billion in TCV in U.S. commercial, with significant growth in deal sizes. Customers are increasingly looking to deploy Palantir's solutions across their entire organizations rather than just for specific use cases. This shift is driven by the desire for enterprise-wide transformation, with newer clients having higher expectations and seeking rapid implementation of AI and other technologies.
Q:What changed from a behavioral perspective among customers to see this accelerated appetite for Palantir?
A:Customers are realizing the limitations of alternative solutions and are drawn to Palantir's proven results in various verticals. They are now more willing to adopt Palantir's solutions comprehensively, addressing inefficiencies and focusing on valuable problems. Internally, Palantir is doubling down on maintaining its unique culture and ensuring its products are the best fit for deployments, especially mission-critical ones.
Q:How do you think about opportunities like Golden Dome and U.S. government growth?
A:Palantir sees significant opportunities in U.S. government projects, with growth driven by involvement in critical areas like defense and national security. The company is focused on supporting efforts to address major challenges, including conflicts and issues like fentanyl trafficking, emphasizing its commitment to the average American and national interests.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing specific opportunities like Golden Dome and provided limited details on certain U.S. government projects, using broad and sometimes political language instead of concrete information.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Hivemind
AI application
AI enterprise
AI leverage
AI transformation
AIP AI
American Tech
FDEs customer
Rule score
TCV booking
TWG
Tech Fellowship
agent
army
background
base
capability
contract TCV
device
enterprise AI
enterprise AIP
fellowship
foundry
fruit
generation
idea
legacy
mission
momentum
ontology investment
platform
proposal
rate point
reindustrialization
score point
suite
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.
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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.
