Palantir Reports Revenue Growth of 21% Year-Over-Year and Sixth Consecutive Quarter of GAAP Profitability; GAAP EPS of $0.04 in Q1 2024

Palantir Technologies Inc. (NYSE:PLTR) today announced financial results for the first quarter ended March 31, 2024.

Q1 2024 Highlights

• GAAP net income of $106 million, representing a 17% margin
  • Sixth consecutive quarter of GAAP profitability
• GAAP income from operations of $81 million, representing a 13% margin
  • Fifth consecutive quarter of GAAP operating profitability
• GAAP earnings per share (“EPS”) of $0.04
• Adjusted EPS of $0.08
• Revenue grew 21% year-over-year and 4% quarter-over-quarter to $634 million
• US commercial highlights
  • US commercial revenue grew 40% year-over-year and 14% quarter-over-quarter to $150 million
  • US commercial customer count grew 69% year-over-year and 19% quarter-over-quarter to 262 customers
  • US commercial remaining deal value (“RDV”) grew 74% year-over-year and 14% quarter-over-quarter
• Commercial revenue grew 27% year-over-year and 5% quarter-over-quarter to $299 million
• Government revenue grew 16% year-over-year and 3% quarter-over-quarter to $335 million
  • US government revenue grew 12% year-over-year and 8% quarter-over-quarter to $257 million
• Customer count grew 42% year-over-year and 11% quarter-over-quarter
• Adjusted income from operations of $226 million, representing a margin of 36%
  • Sixth consecutive quarter of expanding adjusted operating margins
• Rule of 40 score of 57%
• Cash from operations of $130 million, representing a 20% margin
• Adjusted free cash flow of $149 million, representing a 23% margin
• Cash, cash equivalents, and short-term US treasury securities of $3.9 billion

Q1 2024 Financial Summary

 

(Unaudited)

(Amounts in thousands, except percentages and per share amounts)

First Quarter

Amount

Revenue

 

 

$

634,338

 

Year-over-year growth

 

 

 

21

%

 

 

 

 

 

Amount

 

Margin

Income from Operations

$

80,881

 

 

13

%

Adjusted Income from Operations

$

226,458

 

 

 

36

%

Cash from Operations

$

129,579

 

 

 

20

%

Adjusted Free Cash Flow

$

148,634

 

 

 

23

%

Net Income Attributable to Common Stockholders

$

105,530

 

 

 

17

%

Adjusted Net Income Attributable to Common Stockholders

$

196,937

 

 

 

Adjusted EBITDA

$

234,896

 

 

 

37

%

GAAP EPS, Diluted

$

0.04

 

 

 

Adjusted EPS, Diluted

$

0.08

 

 

 

Outlook

For Q2 2024, we expect:

• Revenue of between $649 – $653 million.
• Adjusted income from operations of between $209 – $213 million.

For full year 2024:

• We are raising our revenue guidance to between $2.677 – $2.689 billion.
• We are raising our US commercial revenue guidance to in excess of $661 million, representing a growth rate of at least 45%.
• We are raising our adjusted income from operations guidance to between $868 – $880 million.
• We continue to expect adjusted free cash flow of between $800 million – $1 billion.
• And we continue to expect GAAP operating income and net income in each quarter of this year.

CEO Letter

Palantir CEO Alex Karp’s quarterly letter is available through Palantir’s website at https://www.palantir.com/newsroom/letters.

Earnings Webcast

A live public webcast will be held at 3:00 PM MT / 5:00 PM ET today to discuss the results for our first quarter ended March 31, 2024 and financial outlook. The webcast can be accessed by registering online at https://palantir.events/palantir-earnings-q1-2024. A replay of the webcast will be available at https://investors.palantir.com following the event.

An investor presentation, including supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, will be available through Palantir’s Investor Relations website at https://investors.palantir.com.

Forward-Looking Statements

This press release and statements on our earnings webcast contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development and related timing, distribution, and pricing, expected benefits of and applications for our software platforms, business strategy, and plans (including strategy and plans relating to our Artificial Intelligence Platform (“AIP”), sales and marketing efforts, sales force, partnerships, and customers), investments in our business, market trends and market size, opportunities (including growth opportunities), our expectations regarding our existing and potential investments in, and commercial contracts with, various entities, our expectations regarding macroeconomic events, our expectations regarding potential eligibility or inclusion in market indices, our expectations regarding our share repurchase program, and positioning. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as “guidance,” “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the “SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and other filings and reports that we may file from time to time with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. In particular, the following factors, among others, could cause our results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms, product offerings, and services in general; our ability to increase our number of new customers and revenue generated from customers; our ability to realize some or all of the total contract value of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; our long and unpredictable sales cycle; our ability to successfully execute our channel sales and other strategic initiatives with third parties; our ability to retain and expand our customer base; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; the seasonality of our business; the implementation process for our platforms, which may be complex and lengthy; our ability to successfully develop and deploy new technologies to address the needs of our existing or prospective customers; our ability to make our platforms and product offerings easier to install, consume, and use; our ability to maintain and enhance our brand and reputation; our ability to maintain and enhance our culture as our business grows and as we pursue our business and financial goals; news or social media coverage about us, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; the impact of recent or future global macroeconomic and geopolitical events, such as the ongoing Russia-Ukraine and Israel conflicts, heightened interest rates, monetary policy changes, or foreign currency fluctuations, on the business and operations of our company or of our existing or prospective customers and partners; issues raised by the use of artificial intelligence on our platforms; and any breach or access to our or customer or third-party data.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

Additional Definitions

For the purpose of this press release, our earnings webcast, and our CEO’s letter:

• Total contract value (“TCV”) is the total potential lifetime value of contracts entered into with, or awarded by, our customers at the time of contract execution and remaining deal value (“RDV”) is the total remaining value of contracts as of the end of the reporting period. Except as noted below, TCV and RDV each presume the exercise of all contract options available to our customers and no termination of contracts. However, the majority of our contracts are subject to termination provisions, including for convenience, and there can be no guarantee that contracts are not terminated or that contract options will be exercised. Further, RDV may exclude all or some portion of the value of certain commercial contracts as a result of our ongoing assessments of customers’ financial condition, including the consideration of such customers’ ability and intention to pay, and whether such contracts continue to meet the criteria for revenue recognition, among other factors.

• Remaining performance obligations (“RPO”) reflect the total values of contracts that have been entered into with, or awarded by, our customers, and represent non-cancelable contracted revenue that has not yet been recognized, which includes deferred revenue and, in certain instances, amounts that will be invoiced. We have elected the practical expedient, as permitted under Accounting Standards Codification 606—Revenue from Contracts with Customers, to not disclose remaining performance obligations for contracts with original terms of twelve months or less.

• The term “Strategic Commercial Contracts” is as defined in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

• The term “Rule of 40” refers to the sum of our revenue growth rate year-over-year and our adjusted operating margin for each of the periods presented.

Non-GAAP Financial Measures

This press release and the accompanying tables, as well as our earnings webcast and our CEO’s letter, contain the non-GAAP financial measures adjusted income from operations, which excludes stock-based compensation and related employer payroll taxes; adjusted operating margin; adjusted free cash flow; adjusted free cash flow margin; adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”); adjusted EBITDA margin; adjusted net income attributable to common stockholders; and adjusted EPS, diluted.

We believe these non-GAAP financial measures and other metrics described in this press release help us evaluate our business, identify trends affecting Palantir’s business, formulate business plans and financial projections, and make strategic decisions. We exclude stock-based compensation, which is a non-cash expense, from these non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance and provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team. We exclude employer payroll taxes related to stock-based compensation as it is difficult to predict and outside of Palantir’s control.

Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations as they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. For example, adjusted free cash flow does not reflect our future contractual commitments or the total increase or decrease in our cash balances for a given period. Thus, our non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future, such as stock-based compensation and related employer payroll taxes, the effect of which may be significant.

Available Information

Palantir uses its Investor Relations website at https://investors.palantir.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Palantir’s Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, and webcasts.

About Palantir Technologies Inc.

Foundational software of tomorrow. Delivered today. Additional information is available at https://www.palantir.com.

Palantir Technologies Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited)
	Three Months Ended March 31,
		2024				2023
Revenue	$	634,338			$	525,186
Cost of revenue (1)		116,256				107,645
Gross profit		518,082				417,541
Operating expenses:
Sales and marketing (1)		193,177				187,093
Research and development (1)		110,040				90,100
General and administrative (1)		133,984				136,233
Total operating expenses		437,201				413,426
Income from operations		80,881				4,115
Interest income		43,352				20,853
Other income (expense), net		(13,507	)			(4,136	)
Income before provision for income taxes		110,726				20,832
Provision for income taxes		4,655				1,681
Net income		106,071				19,151
Less: Net income attributable to noncontrolling interests		541				2,349
Net income attributable to common stockholders	$	105,530			$	16,802
Net earnings per share attributable to common stockholders, basic	$	0.05			$	0.01
Net earnings per share attributable to common stockholders, diluted	$	0.04			$	0.01
Weighted-average shares of common stock outstanding used in computing net earnings per share attributable to common stockholders, basic		2,213,545				2,107,780
Weighted-average shares of common stock outstanding used in computing net earnings per share attributable to common stockholders, diluted		2,400,107				2,217,439

(1)

Includes stock-based compensation expense as follows (in thousands):

			Three Months Ended March 31,
				2024				2023
		Cost of revenue	$	10,416			$	9,177
		Sales and marketing		42,156				39,535
		Research and development		26,874				19,924
		General and administrative		46,205				46,078
		Total stock-based compensation	$	125,651			$	114,714

Palantir Technologies Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)
	As of March 31,				As of December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents	$	520,388			$	831,047
Marketable securities		3,347,512				2,843,132
Accounts receivable, net		486,986				364,784
Prepaid expenses and other current assets		81,178				99,655
Total current assets		4,436,064				4,138,618
Property and equipment, net		46,906				47,758
Operating lease right-of-use assets		173,707				182,863
Other assets		150,402				153,186
Total assets	$	4,807,079			$	4,522,425
Liabilities and Equity
Current liabilities:
Accounts payable	$	35,634			$	12,122
Accrued liabilities		206,034				222,991
Deferred revenue		237,195				246,901
Customer deposits		217,634				209,828
Operating lease liabilities		54,056				54,176
Total current liabilities		750,553				746,018
Deferred revenue, noncurrent		20,722				28,047
Customer deposits, noncurrent		1,651				1,477
Operating lease liabilities, noncurrent		163,013				175,216
Other noncurrent liabilities		9,968				10,702
Total liabilities		945,907				961,460
Stockholders’ equity:
Common stock		2,227				2,200
Additional paid-in capital		9,322,803				9,122,173
Accumulated other comprehensive income (loss), net		(5,720	)			801
Accumulated deficit		(5,544,083	)			(5,649,613	)
Total stockholders’ equity		3,775,227				3,475,561
Noncontrolling interests		85,945				85,404
Total equity		3,861,172				3,560,965
Total liabilities and equity	$	4,807,079			$	4,522,425

Palantir Technologies Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
	Three Months Ended March 31,
		2024				2023
Operating activities
Net income	$	106,071			$	19,151
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,438				8,320
Stock-based compensation		125,651				114,714
Noncash operating lease expense		12,366				10,836
Unrealized and realized (gain) loss from marketable securities, net		12,354				8,508
Noncash consideration		(11,907	)			(7,596	)
Other operating activities		(6,774	)			(6,670	)
Changes in operating assets and liabilities:
Accounts receivable, net		(121,884	)			2,709
Prepaid expenses and other current assets		19,399				1,252
Other assets		3,525				(4,551	)
Accounts payable		23,809				(39,921	)
Accrued liabilities		(19,105	)			4,271
Deferred revenue, current and noncurrent		(14,802	)			43,238
Customer deposits, current and noncurrent		7,953				43,631
Operating lease liabilities, current and noncurrent		(15,482	)			(10,536	)
Other noncurrent liabilities		(33	)			20
Net cash provided by operating activities		129,579				187,376
Investing activities
Purchases of property and equipment		(2,664	)			(4,755	)
Purchases of marketable securities		(1,260,327	)			(2,310,367	)
Proceeds from sales and redemption of marketable securities		751,746				709,459
Proceeds from sales of alternative investments		—				51,072
Net cash used in investing activities		(511,245	)			(1,554,591	)
Financing activities
Proceeds from the exercise of common stock options		83,840				25,924
Repurchases of common stock		(9,000	)			—
Other financing activities		408				59
Net cash provided by financing activities		75,248				25,983
Effect of foreign exchange on cash, cash equivalents, and restricted cash		(4,024	)			2,676
Net decrease in cash, cash equivalents, and restricted cash		(310,442	)			(1,338,556	)
Cash, cash equivalents, and restricted cash - beginning of period		850,107				2,627,335
Cash, cash equivalents, and restricted cash - end of period	$	539,665			$	1,288,779

Palantir Technologies Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited)
Non-GAAP Reconciliations
Adjusted Income from Operations and Adjusted Operating Margin (in thousands, except percentages)
	Three Months Ended March 31,
		2024				2023
Income from operations	$	80,881			$	4,115
Add: stock-based compensation		125,651				114,714
Add: employer payroll taxes related to stock-based compensation		19,926				6,285
Adjusted income from operations	$	226,458			$	125,114
Adjusted operating margin		36	%			24	%

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin (in thousands, except percentages)
	Three Months Ended March 31,
		2024				2023
Net cash provided by operating activities	$	129,579			$	187,376
Add: cash paid for employer payroll taxes related to stock-based compensation		21,719				6,276
Less: purchases of property and equipment		(2,664	)			(4,755	)
Adjusted free cash flow	$	148,634			$	188,897
Adjusted free cash flow margin		23	%			36	%

Adjusted EBITDA and Adjusted EBITDA Margin (in thousands, except percentages)
	Three Months Ended March 31,
		2024				2023
Net income attributable to common stockholders	$	105,530			$	16,802
Add: net income attributable to noncontrolling interests		541				2,349
Less: interest income		(43,352	)			(20,853	)
Add: other (income) expense, net		13,507				4,136
Add: provision for income taxes		4,655				1,681
Add: depreciation and amortization		8,438				8,320
Add: stock-based compensation		125,651				114,714
Add: employer payroll taxes related to stock-based compensation		19,926				6,285
Adjusted EBITDA	$	234,896			$	133,434
Adjusted EBITDA margin		37	%			25	%

Adjusted Net Income Attributable to Common Stockholders and Adjusted Earnings Per Share, Diluted (in thousands, except per share amounts)
	Three Months Ended March 31,
		2024				2023
Net income attributable to common stockholders	$	105,530			$	16,802
Add: stock-based compensation		125,651				114,714
Add: employer payroll taxes related to stock-based compensation		19,926				6,285
Less: income tax effects and adjustments (1)		(54,170	)			(30,400	)
Adjusted net income attributable to common stockholders	$	196,937			$	107,401
Weighted-average shares used in computing GAAP earnings per share, diluted		2,400,107				2,217,439
Adjusted weighted-average shares used in computing adjusted earnings per share, diluted		2,400,107				2,217,439
Adjusted earnings per share, diluted	$	0.08			$	0.05

(1)

Income tax effect is based on a long-term estimated annual effective tax rate of 23.0% for the periods ended 2024 and 2023.

 

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The Palantir Stock at the time of publication of the news with a raise of +1,72 % to 22,21EUR on Lang & Schwarz stock exchange (06. Mai 2024, 22:10 Uhr).