Can Strong Earnings and Microsoft Partnership for US Defense Sustain Palantir's Boost?

The company reported second-quarter revenue of $678.13 million, a 27% jump year-over-year and ahead of analysts' estimates. Net income of $134 million also beat projections, with earnings per share reaching a record high of 6 cents.

The company reported second-quarter revenue of $678.13 million, a 27% jump year-over-year and ahead of analysts' estimates. Net income of $134 million also beat projections, with earnings per share reaching a record high of 6 cents.

The company's commercial revenue grew 33% to $307 million, with U.S. commercial sales up 55% to $159 million.

The company’s trailing 12-month revenue in its U.S. government business, which includes intelligence and defense agencies, surpassed $1 billion for the first time. The company said it earned 54% of its revenue from government clients during the second quarter.

Palantir CEO Alex Karp said the strong results reflected the "unbridled demand for and understanding of the capabilities of our software."

"The growth of our business has been re-accelerating steadily, and we see an unprecedented opportunity ahead to capture and build on that momentum," Karp said.

The company said it anticipates third-quarter revenue of between $697 million and $701 million, ahead of analysts' projections, and lifted its full-year guidance to between $2.74 billion and $2.75 billion, up from $2.68 billion to $2.69 billion previously.

Moreover, for the second quarter, Palantir's remaining performance obligations (RPO) amounted to $1.37 billion, a 41% increase year-over-year, with Billings of $718 million, marking a 19% growth compared to the same period last year, showing a significant rebound from the previous quarter.

Source: Palantir

MicrosoftandPalantir Technologiesare teaming up to provide cloud, artificial intelligence, and analytics capabilities to the US Defense and Intelligence Community.

Palantir will deploy its products, including the "Gotham" software — which assists in locating targets on battlefields — on Microsoft's Azure Government and Azure Government Secret cloud platforms.

“Bringing Palantir and Microsoft capabilities to our national security apparatus is a step change in how we can support the defense and intelligence communities,” said Shyam Sankar, CTO of Palantir. “we’re thrilled to be the first industry partner to deploy Microsoft Azure OpenAI Service in classified environments.”

“With this marquee deal solidified and Microsoft leveraging Palantir for AI and large language model (LLM) capabilities to the US government, the company can now increase the pace of AI implementation while Palantir continues to accelerate AIP adoption within the federal sector,” they wrote in a note to clients.

“We believe this will be a launching pad for the Palantir AIP story to hit the DOD and broader Beltway ecosystem over the next 12 to 18 months.”

“With these results we maintain our eligibility for the S&P,” Palantir Chief Financial Officer David Glazer said in an interview last Monday, referring to the company’s possible inclusion in the S&P 500 Index, an event many investors are waiting for.

Source: Investopedia, Reuters, Proactive investors